Dark clouds looming over tourism industry

May 28 2008 by Chris Knox, The Journal

The region’s tourism industry is about to take a big hit after ferry firm DFDS cuts its route from Stavanger in Norway to Tyneside. But that is far from the only problem facing the sector and whatever the weather, Chris Knox discovers the industry bracing itself for a gloomy summer.

THE weather may not be tropical but the North East has long boasted a strong and steady tourist industry with visitors drawn by the splendour of Durham Cathedral and Alnwick Castle, or bracing walks through Weardale or along Hadrian’s Wall.

Every year sees around nine million overnight tourists visit the North East to soak up the region’s unique atmosphere and geography. And these visitors provide a significant contribution to the region’s economy with £3.5bn arriving in revenue each year and the jobs of 70,000 people in hotels, attractions, bars and restaurants relying on the industry.

But the region’s tourist industry, which has long been squeezed by cheap flights to more exotic climes, is being harder hit than many sectors by the credit crunch as people are now beginning to shy away from unnecessary purchases.

This has led to plummeting visitor numbers and a lack of forward bookings which is scaring many North East business owners into believing that 2008 could be one of their worst years yet. The loss of ferry giant DFDS’s service from Norway to Tyneside is just one among many problems whittling away at the industry’s revenues.

Although many business owners experienced a better than expected year in 2007, others were harder hit by last year’s miserable weather. The region’s bed and breakfast market was particularly hit, with occupancy rates standing at 35% compared to a national average of 44% and dropping from 42% in 2006.

The staggered timing of this year’s Easter break has already ensured a slow start to the tourist calendar in the North East and has led to a number of guesthouses wondering whether they will make a recovery before the end of the summer.

Anne Park, owner of the Tankerville Arms hotel in Wooler, Northumberland, is among many rural business owners worried about her prospects this year. She said: “This Easter was a bit of a non-event due to its earlier timing. It usually kicks off the tourism season and gives hotels and attractions a good idea of what to expect for the rest of the year.

“We can’t rely on passing trade anymore as, for one reason or another, there have been fewer people coming to visit north Northumberland this year. As a result we have been unable to pass on our increased costs to our customers for fear of losing our regulars. It looks like being a tough year.”

Fears of a poor 2008 are justified. One major concern is the rising cost of fuel.

Peter Sloyan, former head of Northumbria Tourist Board and now a consultant to the sector, said: “I’m afraid that the rural economy looks like going the same way as the seaside as the increased pace and cost of people’s lives means they are having to cram everything into the odd weekend, which means staying in city centres which are closer.

“This is being exacerbated by the rising cost of fuel, which means people are less able to drive out into the country .”

Another problem affecting North East tourism is the extension of low-cost air flights from Newcastle Airport.

Although many firms in the region will be hoping that tighter purse strings and a weaker pound will persuade the British public to take their holidays in the UK, others believe the lure of return flights under the £100 mark will still prove too tempting.

Mr Sloyan said: “Although the current exchange rate for euros is not favourable, I still think that tourists, both at home and abroad, see the UK as expensive. Although the sun seems to be out earlier this year, most people remember what a washout last summer was and will be making sure they don’t suffer the same fate this time round.”

It is not only hotels that are having a hard time of it at present, with many of the region’s attractions witnessing dwindling visitor numbers.

One example is Vindolanda Roman fort near Bardon Mill and the Roman Army Museum, in Walltown Crags near Haltwhistle.

The two sites, which are located deep in Hadrian’s Wall country, have become a staple for tourists keen to sample some of the region’s fascinating history, with live excavation digs at Vindolanda giving them a unique glimpse into the past.

However, the Vindolanda Trust, which operates the sites, is struggling to maintain its visitor numbers and is doubtful of getting near the 84,000 mark it achieved in 2004. With visitor numbers at 81,012 in 2007, the trust is now preparing for a marked decline this year and expect even fewer at the museum, which dropped by more than 3,000 to 43,558 last year.

Patricia Burley, director at the Vindolanda Trust, said: “We’re experiencing what the whole of the North East tourism sector is experiencing. The combination of cheap flights to foreign countries, higher fuel bills and a staggered Easter period has definitely taken its toll.

“However, our visitor numbers are still quite strong and we believe we can avoid major damage due to our unique attractions and our live digs.”

There are some business owners who have a sunnier outlook. Michael Ruddy at York House Hotel, Whitley Bay, has had to change his business model to attract a healthy clientele and has targeted the business community in order to make up for the drop in visitors to the seaside area.

The hotel, which has 14 spacious en-suite rooms, is now the height of luxury since it was refurbished eight years ago. It has become a favourite among contract workers based in Blyth and boasts a daily occupancy rate that rarely dips under 90%.

Owner manager Mr Ruddy said: “We rarely have to rely on passing trade as the refurbishments have made our rooms attractive to the business community.

“In fact, we have had a group of five IT workers living in the hotel between Monday and Thursday for the past two years, which has helped a lot.

“I appreciate that there will be some hotels in the countryside that can’t draw upon local businesses, but there are many firms that may need to look at ways of marketing themselves better in order to bring in new visitors.”

One way that hotels and attractions can improve their marketing, as well as create an alternate revenue stream, is through an online booking system. Providing a means of allowing customers to book online quickly and easily, and with proof of receipt, has become a necessity in the hotel industry.

Figures show that 70% of business travellers and 64% of leisure visitors use the internet to make their reservation and yet a number of smaller hoteliers have yet to get online, either through lack of funds or because of a lack of technical know-how.

Louise Davis, head of tourism and culture at regional development agency One NorthEast, said: “There are so many hotels out there that are in beautiful parts of the country, but they just aren’t being visited as they don’t have an online booking system. People want easier ways of booking than having to use the phone and are more likely to trust a hotel that can take bookings online.”

One NorthEast has a range of funding available to small businesses in this area as well as an agreement with IT group Eviivo to supply its Desti.ne Frontdesk online booking software free of charge to firms that sign up with Tourism Network North East, which brings together tourism partnerships in Northumberland, Tyne and Wear, County Durham and Tees Valley.

Ms Davis said: “There are a lot of issues worrying the tourism community in the North East but they need to realise that there is help available and they can really make a difference and safeguard their futures.”

The North East tourism sector has proven not to be immune from the credit crunch. However, there are a number of bodies that are doing their best to highlight the region as one of the country’s national treasures, with OneNorth East’s Passionate People, Passionate Places campaign being marketed as far as Australia. Only time will tell whether the clouds lift over certain areas of the North East’s tourism economy.